AG Responds to Letters about Keiro Sale

Since it issued a conditional approval of the sale of Keiro Senior HealthCare’s facilities to for-profit Pacifica Companies, the state Attorney General’s Office has been receiving messages from community members and politicians alike, asking that the sale be postponed for a public hearing.

The most high-profile of these messages was sent this Wednesday from Rep. Judy Chu (D-Pasadena) and 15 other members of Congress. The Ad Hoc Committee to Save Keiro has also been mailing petition signatures to the Attorney General’s Office.

The attorney general’s response was sent out on Thursday to Charles Igawa, a representative of the Ad Hoc Committee, and forwarded to Chu and Assemblymember David Hadley (R-Torrance). It upholds and explains the office’s decision to approve the Keiro sale, stating that Keiro provided adequate information about the sale to the public. It then reiterates the conditions of the sale, which will keep facility operations the same for five years, and explains that the profits from the sale must be used “solely and exclusively for healthcare and residential care services to Japanese American older adults.”

The letter also mentions for the first time that three positions on the Community Advisory Board will be given to members of the Ad Hoc Committee. The advisory board will be responsible for making sure that the new owners and operators adhere to the attorney general’s conditions of sale.

The full text of the letter is below:

Dear Dr. Igawa:

I write on behalf of Attorney General Kamala D. Harris in reply to the correspondence that this office has received regarding the sale of Keiro. This proposed sale has generated significant community interest and this letter is intended to serve as an official response.

On Sept. 2, 2015, the Office the Attorney General completed its evaluation of Keiro Services’ request to sell its four facilities — two skilled nursing facilities, one intermediate care facility, and one residential care facility for the elderly — to affiliates of Pacifica Companies LLC, a California limited liability company. This included a thorough review of more than 2,000 pages of information, which featured a detailed history of approximately 60 community meetings over the course of two years regarding the sale.

Keiro Services provided information related to the details of the proposed agreement and its necessity in meetings with its residents and their families, at community events and workshops, and with its staff and volunteers in the form of in-person meetings, written notices, Internet publications, email communications, press releases, and written announcements in both the English and Japanese languages. Community members were also made aware of the proposed transaction through frequent news coverage.

Finally, Keiro Services also provided public notices at all of its facilities with instructions on how to obtain written materials related to the transaction.

This office approved the sale after conducting a careful review, as required by California Corporations Code Section 5914 et seq, and concluding that the terms of the transaction were fair and reasonable. While it has been requested that the Attorney General postpone the sale, this office cannot legally retract its approval. However, we are cognizant of the urgent and ongoing need to safeguard the future of the residents at these facilities. The Attorney General recognizes that Keiro’s legacy of culturally competent care is of tremendous importance to the community it serves.

To this end, this office imposed a number of conditions on the transaction to ensure that residents at Keiro continue to receive the same standard of care under new ownership.

The conditions require that Pacifica — through its operators Aspen Skilled Healthcare, Inc. and Northstar Senior Living, Inc. — accept the “old-tier” rent amounts currently accepted at Keiro Retirement Home and the residents will have placement priority for either higher or lower levels of services and care over residents admitted from outside.

Our conditions also require that for five years, the operators provide the same types and levels of services to Medi-Cal and Medicare beneficiaries as currently provided at each facility. Moreover, the operators are also required by the conditions to operate the facilities in a culturally sensitive manner that fosters an awareness and acceptance of the cultural characteristics, history, values, belief systems, and behaviors of the Japanese American residents and families and community.

For example, the conditions require that the facilities provide menus with traditional Japanese dishes and provide traditional Japanese activities, such as ikebana, origami, and shigin. The conditions also require that the facilities continue to provide Japanese broadcast news and offer reading materials, videos and discs in the Japanese language. The facilities are also required to observe Japanese holidays.

These conditions were carefully drafted to ensure that specific services available to Japanese American residents are consistently continued after the sale.

In addition, the Attorney General has announced that she will require the operators to establish a Community Advisory Board that is primarily composed of members from the Japanese American community to effectually represent residents, families, and the supporting community. Under this office’s conditions, the operators will be required to consult with a Community Advisory Board before making any changes to its community benefit programs and before making any changes involving “culturally sensitive” matters.

Additionally, the Community Advisory Board must review and approve all annual reports submitted by Pacifica regarding compliance with our Conditions. It is our expectation that this Community Advisory Board will not only act as link between the operators and the community, but will also act as an important check to ensure that the residents continue to receive the quality care they deserve.

Keiro Services will appoint members to the Community Advisory Board; at the direction of this office, three of these positions will be given to members of the Ad Hoc Committee to Save Keiro.

Finally, the Ad Hoc Committee has also raised concerns about the use of the donations provided to Keiro Services throughout the years by the Japanese American community. The Attorney General shares these concerns and has imposed conditions specifically to protect the impact of these donations and to preserve the intent of their donors. Under the conditions, all net proceeds from the sale of Keiro shall be used and distributed solely and exclusively for healthcare and residential care services to Japanese American older adults.

Such healthcare and residential care services shall include providing direct health care services, wellness programs, health screening, health research, health education, health fairs, and other programs to improve the health and wellness, directly and through grant-making, of or for Japanese American older adults.

On behalf of the Attorney General, I would like to thank you and your committee for serving as an effective voice for the community at Keiro. This office shares your commitment to protecting health, dignity, and comfort for these individuals. We are confident that our conditions not only protect the residents and staff, but will ensure the continuation of culturally sensitive services provided by these facilities in the future.

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